Now Reading: India’s retail inflation holds steady at 4.45% in July
-
01
India’s retail inflation holds steady at 4.45% in July
India's retail inflation edged up to 4.45% in July from 4.38% in June, remaining above the RBI's 4% target but within its 2%-6% tolerance band, according to official CPI data. The rise…
The Story in Brief
India's retail inflation edged up to 4.45% in July from 4.38% in June, remaining above the RBI's 4% target but within its 2%-6% tolerance band, according to official CPI data. The rise was driven by food prices (onion up 22.5%, garlic 35.4%, ginger 83.6%) and transport fuel inflation at 7.55%, while core inflation stayed flat at 4%.
The Hindu reports rural food inflation rose to 5.79% from 5.45% in June, while urban food inflation eased marginally. The MPC expects CPI inflation to average 5% in 2026-27, with the June quarter coming in 30 basis points below its estimate. The RBI is likely to keep the repo rate on hold through the second quarter, balancing supply-side price pressures against weakening economic momentum as the HSBC composite PMI fell to a near two-year low of 54.3 in July.
The Indian Opinion
The lazy narrative that the RBI is behind the curve on inflation ignores the facts: the July spike is driven by onions, garlic, and fuel, not demand. Food inflation at 5.2% and transport fuel at 7.55% are supply-side problems that rate hikes cannot fix. Yet the same commentators who demand a rate cut now also warn about a slowing economy. The real test will come with the September quarter inflation print: if core inflation stays below 4%, the MPC's pause is vindicated.
Sources (2): hindustantimes.com, thehindu.com
This story was synthesised by AI from the 2 sources linked above.
Updated: this story now draws on 2 sources.
